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09.05.2022 12:00:00
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Perimeter Solutions Reports First Quarter 2022 Financial Results
Net sales increased 70% year-over-year, with strong growth in both the Fire Safety and Oil Additives businesses
Fire Safety Adjusted EBITDA increased in the seasonally modest first quarter
Oil Additives Adjusted EBITDA increased 97% in Q1, driven by execution on our operational value drivers
CLAYTON, Mo., May 9, 2022 /PRNewswire/ -- Perimeter Solutions, SA (NYSE: PRM) ("Perimeter" or the "Company"), a leading provider of mission-critical firefighting products and services, as well as high-quality lubricant additives, today reported financial results for its first quarter ended March 31, 2022.
First Quarter 2022 Results
- Net sales increased 70% to $57.8 million in the first quarter, as compared to $33.9 million in the prior-year quarter.
- Fire Safety sales increased 141% to $18.5 million, as compared to $7.7 million in the prior year.
- Oil Additives sales increased 50% to $39.3 million, as compared to $26.3 million in the prior year.
- Net income during the first quarter was $37.8 million, or $0.22 per diluted share, an increase of $56.3 million from a net loss of $18.5 million, or $0.35 per diluted share, for the same period of 2021.
- Adjusted EBITDA increased 285% to $12.0 million in the first quarter, as compared to $3.1 million in the prior-year quarter.
- Fire Safety Adjusted EBITDA increased $1.3 million to an Adjusted EBITDA loss of $3.3 million, as compared to an Adjusted EBITDA loss of $4.6 million in the prior year.
- Oil Additives Adjusted EBITDA increased 97% to $15.3 million, as compared to $7.8 million in the prior year.
Conference Call and Webcast
As previously announced, Perimeter Solutions management will hold a conference call at 8:30 a.m. ET on Monday, May 9, 2022 to discuss financial results for the first quarter 2022 . The conference call can be accessed by dialing (877) 407-9764 (toll-free) or (201) 689-8551 (toll).
The conference call will also be webcast simultaneously on Perimeter's website (https://www.perimeter-solutions.com/en/), accessed under the Investor Relations page. The webcast link will be made available on the Company's website prior to the start of the call; go to the investor relations page of our website to the News & Events menu and click on "Events & Presentations."
A slide presentation will also be available for reference during the conference call; go to the investor relations page of our website to the News & Events menu and click on "Events & Presentations."
Following the live webcast, a replay will be available on the Company's website. A telephonic replay will also be available approximately two hours after the call and can be accessed by dialing (877) 660-6853 (toll-free) or (201) 612-7415 (toll). The telephonic replay will be available until June 9, 2022.
About Perimeter Solutions
Perimeter Solutions is a leading global solutions provider, providing high-quality firefighting products and lubricant additives. The Company's business is organized and managed in two reporting segments: Fire Safety and Oil Additives.
The Fire Safety business consists of formulating, manufacture and sale of fire retardants and firefighting foams that assist in combating various types of fires, including wildland, structural, flammable liquids and others. Our Fire Safety business also offers specialized equipment and services, typically in conjunction with our fire management products, to support our customers' firefighting operations. Our specialized equipment includes airbase retardant storage, mixing, and delivery equipment; mobile retardant bases; retardant ground application units; mobile foam equipment; and equipment that we custom design and manufacture to meet specific customer needs. Our service network can meet the emergency resupply needs of over 150 air tanker bases in North America, as well as many other customer locations in North America and internationally. The segment is built on the premise of superior technology, exceptional responsiveness to our customers' needs, and a "never-fail" service network. The segment sells products to government agencies and commercial customers around the world.
The Oil Additives business produces and sells high quality Phosphorus Pentasulfide ("P2S5") primarily used in the preparation of lubricant additives, including a family of compounds called Zinc Dialkyldithiophosphates ("ZDDP") that provide critical anti-wear protection to engine components. P2S5 is also used in pesticide and mining chemicals applications.
Forward-looking Information
This press release may contain "forward-looking statements" within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Forward-looking statements can be identified by words such as: "anticipate," "intend," "plan," "goal," "seek," "believe," "project," "estimate," "expect," "strategy," "future," "likely," "may," "should," "will" and similar references to future periods.
Any such forward-looking statements are not guarantees of performance or results, and involve risks, uncertainties (some of which are beyond the Company's control) and assumptions. Although Perimeter believes any forward-looking statements are based on reasonable assumptions, you should be aware that many factors could affect Perimeter's actual financial results and cause them to differ materially from those anticipated in any forward-looking statements, including the risk factors described from time to time by us in our filings with the Securities and Exchange Commission ("SEC"), including, but not limited to, the Company's Annual Report on Form 10-K for the year ended December 31, 2021 filed with the SEC on March 31, 2022. Shareholders, potential investors and other readers should consider these factors carefully in evaluating the forward-looking statements.
Any forward-looking statement made by Perimeter in this press release speaks only as of the date on which it is made. Perimeter undertakes no obligation to update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law.
CONTACT:
ir@perimeter-solutions.com
PERIMETER SOLUTIONS, SA AND SUBSIDIARIES | ||||
Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) | ||||
(in thousands, except share and per share data) | ||||
(Unaudited) | ||||
Successor | Predecessor | |||
Three Months | Three Months | |||
Net sales | $ 57,758 | $ 33,925 | ||
Cost of goods sold | 44,627 | 24,974 | ||
Gross profit | 13,131 | 8,951 | ||
Operating expenses: | ||||
Selling, general and administrative expense | 19,808 | 8,927 | ||
Amortization expense | 13,855 | 13,249 | ||
Founders advisory fees - related party | (59,848) | — | ||
Other operating expense | 196 | 312 | ||
Total operating expenses | (25,989) | 22,488 | ||
Operating income (loss) | 39,120 | (13,537) | ||
Other expense (income): | ||||
Interest expense, net | 10,496 | 7,851 | ||
Unrealized foreign currency loss | 880 | 2,798 | ||
Other expense (income), net | 165 | (274) | ||
Total other expense, net | 11,541 | 10,375 | ||
Income (loss) before income taxes | 27,579 | (23,912) | ||
Income tax benefit | 10,232 | 5,383 | ||
Net income (loss) | 37,811 | (18,529) | ||
Other comprehensive income (loss), net of tax: | ||||
Foreign currency translation adjustments | 126 | (966) | ||
Total comprehensive income (loss) | $ 37,937 | $ (19,495) | ||
Earning (loss) per share: | ||||
Basic | $ 0.24 | $ (0.35) | ||
Diluted | $ 0.22 | $ (0.35) | ||
Weighted average number of ordinary shares outstanding: | ||||
Basic | 160,251,199 | 53,045,510 | ||
Diluted | 174,777,232 | 53,045,510 | ||
PERIMETER SOLUTIONS, SA AND SUBSIDIARIES | |||
Condensed Consolidated Balance Sheets | |||
(in thousands, except share and per share data) | |||
March 31, | December 31, | ||
Assets | (Unaudited) | ||
Current assets: | |||
Cash and cash equivalents | $ 153,543 | $ 225,554 | |
Accounts receivable, net | 33,331 | 24,319 | |
Inventories | 117,515 | 110,087 | |
Income tax receivable | 17,935 | 816 | |
Prepaid expenses and other current assets | 9,901 | 14,161 | |
Total current assets | 332,225 | 374,937 | |
Property, plant, and equipment, net | 60,773 | 62,247 | |
Goodwill | 1,042,280 | 1,041,325 | |
Customer lists, net | 743,902 | 753,459 | |
Technology and patents, net | 244,008 | 247,368 | |
Tradenames, net | 98,744 | 100,005 | |
Other assets | 1,664 | 2,219 | |
Total assets | $ 2,523,596 | $ 2,581,560 | |
Liabilities and Shareholders Equity | |||
Current liabilities: | |||
Accounts payable | $ 21,258 | $ 27,469 | |
Accrued expenses and other current liabilities | 28,542 | 19,025 | |
Founders advisory fees payable - related party | 29,503 | 53,547 | |
Deferred revenue | 825 | 445 | |
Total current liabilities | 80,128 | 100,486 | |
Long-term debt | 664,410 | 664,128 | |
Deferred income taxes | 304,974 | 298,633 | |
Founders advisory fees payable - related party | 209,109 | 312,242 | |
Redeemable preferred shares | 97,812 | 96,867 | |
Redeemable preferred shares - related party | 3,735 | 3,699 | |
Other non-current liabilities | 22,145 | 22,195 | |
Total liabilities | 1,382,313 | 1,498,250 | |
Commitments and contingencies | |||
Shareholders' equity: | |||
Ordinary shares, $1 nominal value per share; 4,000,000,000 shares authorized; | 163,235 | 157,237 | |
Additional paid-in capital | 1,684,071 | 1,670,033 | |
Accumulated other comprehensive loss | (7,009) | (7,135) | |
Accumulated deficit | (699,014) | (736,825) | |
Total shareholders' equity | 1,141,283 | 1,083,310 | |
Total liabilities and shareholders' equity | $ 2,523,596 | $ 2,581,560 | |
PERIMETER SOLUTIONS, SA AND SUBSIDIARIES | ||||
Condensed Consolidated Statements of Cash Flows | ||||
(in thousands) | ||||
(Unaudited) | ||||
Successor | Predecessor | |||
Three Months | Three Months | |||
Cash flows from operating activities: | ||||
Net income (loss) | $ 37,811 | $ (18,529) | ||
Adjustments to reconcile net income (loss) to net cash used in operating activities: | ||||
Founders advisory fees - related party (change in accounting fair value) | (59,848) | — | ||
Depreciation and amortization expense | 16,371 | 15,146 | ||
Interest and payment-in-kind on preferred shares | 1,634 | — | ||
Share-based compensation | 5,724 | — | ||
Deferred income taxes | 6,239 | 2,183 | ||
Amortization of deferred financing costs | 395 | 811 | ||
Amortization of acquisition related inventory step-up | 9,299 | — | ||
Changes in operating assets and liabilities, net of acquisitions: | ||||
Accounts receivable | (8,921) | 11,513 | ||
Inventories | (16,782) | (10,970) | ||
Income tax receivable | (16,150) | (7,551) | ||
Prepaid expenses and current other assets | 4,164 | 5,696 | ||
Other assets | 599 | 546 | ||
Accounts payable | (6,143) | 6,445 | ||
Deferred revenue | 372 | (22) | ||
Accrued expenses and other current liabilities | 7,833 | (5,439) | ||
Founders advisory fees - related party (cash settled) | (53,547) | — | ||
Other liabilities | 54 | (11) | ||
Net cash used in operating activities | (70,896) | (182) | ||
Cash flows from investing activities: | ||||
Purchase of property and equipment | (1,313) | (1,674) | ||
Purchase price adjustment under Business Combination Agreement | (1,638) | — | ||
Purchase of businesses, net of cash acquired | — | (3,607) | ||
Net cash used in investing activities | (2,951) | (5,281) | ||
Cash flows from financing activities: | ||||
Proceeds from exercise of warrants | 529 | — | ||
Repayments of long-term debt | — | (1,403) | ||
Net cash provided by (used in) financing activities | 529 | (1,403) | ||
Effect of foreign currency on cash and cash equivalents | 1,307 | 1,717 | ||
Net change in cash and cash equivalents | (72,011) | (5,149) | ||
Cash and cash equivalents, beginning of period | 225,554 | 22,478 | ||
Cash and cash equivalents, end of period | $ 153,543 | $ 17,329 | ||
Supplemental disclosures of cash flow information: | ||||
Cash paid for interest | $ 145 | $ 7,119 | ||
Cash received for income taxes | $ 17 | $ — | ||
Non-cash investing and financing activities: | ||||
Liability portion of founders advisory fees - related party reclassified to additional paid in | $ 13,783 | $ — | ||
Non-GAAP Financial Metrics
Adjusted EBITDA
The computation of adjusted EBITDA is defined as net income plus income tax expense, net interest and other financing expenses, and depreciation and amortization, adjusted on a consistent basis for certain non-recurring, unusual or non-operational items in a balanced manner and on a segment basis. These items include (i) expenses related to the Business Combination, (ii) founder advisory fee expenses, (iii) stock compensation expense (iv) non-cash impact of purchase accounting on the cost of inventory sold (v) contingent future payment related to an acquired business (vi) management fees related to the services provided by SK Capital Partners IV-A, L.P. and SK Capital Partners IV-B, L.P (collectively, the "Sponsor") when acting in a management capacity and (vi) unrealized foreign currency loss (gain). The Corporate category includes unallocated costs related to our corporate headquarter activities. To supplement the Company's consolidated financial statements presented in accordance with U.S. GAAP, Perimeter is providing a summary to show the computations of adjusted EBITDA, and reconciliations from U.S. GAAP income (loss) before income taxes, taking into account certain charges and gains that were recognized during the periods presented (in thousands).
Consolidated | ||||
Successor | Predecessor | |||
(Unaudited) | Three Months | Three Months | ||
Income (loss) before income taxes | $ 27,579 | $ (23,912) | ||
Depreciation and amortization | 16,371 | 15,146 | ||
Interest and financing expense | 10,496 | 7,851 | ||
Founders advisory fees - related party | (59,848) | — | ||
Transaction expenses 1 | 1,476 | 290 | ||
Share-based compensation expense | 5,724 | — | ||
Non-cash purchase accounting impact 2 | 9,299 | — | ||
Management fees 3 | — | 312 | ||
Contingent future payments 4 | — | 625 | ||
Unrealized foreign currency loss | 880 | 2,798 | ||
Adjusted EBITDA | $ 11,977 | $ 3,110 | ||
Net sales | $ 57,758 | $ 33,925 | ||
Operating Segments | ||||
Fire Safety | ||||
Successor | Predecessor | |||
(Unaudited) | Three Months | Three Months | ||
Loss before income taxes | $ (38,425) | $ (24,412) | ||
Depreciation and amortization | 12,778 | 10,738 | ||
Interest and financing expense | 8,395 | 7,175 | ||
Transaction expenses 1 | 925 | 290 | ||
Share-based compensation expense | 3,630 | — | ||
Non-cash purchase accounting impact 2 | 9,299 | — | ||
Management fees 3 | — | 312 | ||
Contingent future payments 4 | — | 625 | ||
Unrealized foreign currency loss | 64 | 626 | ||
Adjusted EBITDA | $ (3,334) | $ (4,646) | ||
Net sales | $ 18,470 | $ 7,650 | ||
Oil Additives | ||||
Successor | Predecessor | |||
(Unaudited) | Three Months | Three Months | ||
Income before income taxes | $ 7,889 | $ 500 | ||
Depreciation and amortization | 3,593 | 4,408 | ||
Interest and financing expense | 468 | 676 | ||
Transaction expenses 1 | 551 | — | ||
Share-based compensation expense | 1,994 | — | ||
Unrealized foreign currency loss | 816 | 2,172 | ||
Adjusted EBITDA | $ 15,311 | $ 7,756 | ||
Net sales | $ 39,288 | $ 26,275 | ||
Corporate | ||||
Successor | ||||
(Unaudited) | Three Months | |||
Income before income taxes | $ 58,115 | |||
Interest and financing expense | 1,633 | |||
Founders advisory fees - related party | (59,848) | |||
Share-based compensation expense | 100 | |||
Adjusted EBITDA | $ — | |||
____________________ | |
(1) | Adjustment to reflect non-recurring professional fees and financing costs incurred related to business combination with Perimeter |
(2) | Represents the non-cash impact of purchase accounting on the cost of inventory sold. The inventory acquired received a purchase |
(3) | Adjustment to reflect fees pertaining to services provided by the Sponsor when acting in a management capacity on strategic and |
(4) | Adjustment to reflect deferred consideration paid with respect to a 2019 acquisition. |
View original content:https://www.prnewswire.com/news-releases/perimeter-solutions-reports-first-quarter-2022-financial-results-301542266.html
SOURCE Perimeter Solutions
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